WPCNR SCHOOL DAYS. News & Comment. By John F. Bailey. February 6, 2008 UPDATED 5:45 PM EST: Last month the school district introduced a preliminary $190.7 Million budget. The key word here was “preliminary.” This evening, Assistant Superintendent for Business Fred Seiler, will present perhaps a trimmed budget to the first meeting of the Annual Budget Committee of 30 prominent citizens in the Annual School Budget Committee Process.
The budget is taken up as inflation of 4% nationally is affecting operating costs, and driving White Plains inflation levels to 4-1/2%. WPCNR has provided an enhanced chart showing the White Plains budget trends related to inflation, roughly adjusted to White Plains inflation, over the last decade.
The “preliminary” year-to-year school budget increase of 9.5% was more than three times the rate of natonal inflation. In 2007 the national inflation rate was 2.85%, but in White Plains it was more than that, 3.14%, according to WPCNR analysis.
If you adjust the cost of living in White Plains where it costs 12% more to live than if you live in the midwestern Chicago metropolitan area, the inflation for White Plains was not 2.85%, but 3.14%. Presently the current rate of inflation is 4.08%, adjusting for White Plains (+12%) brings a rough rate of 4.5% inflation currently. This is sure to rise with the escalation of oil prices approach $100 a barrel. News reports have suggested gasoline prices of $4.50 a gallon by summer.
The current school budget was the first time in the last decade the budget increase had been even close to the inflation rate. The district has consistently averaged close to doubling the inflation rate in their budgets.
In the previous four years the inflation per year, adjusted for White Plains (12% higher than national inflation rate) are
Inflation In White Plains Compared to School Budget Increases
National Avg Infl Rate White Plains Adjusted School Increase Tax Incr.
2007: 2.85% 3.19% 4.4% 6.95%
2006: 3.24% 3.62% 7.16% 8.12%
2005: 3.39% 3.79% 7.61% 9.36%
2004: 2.68% 3.00% 6.82% 7.53%
2003: 2.27% 2.54% 6.08% 6.89%
2002: 1.59% 1.78% 6.94% 8.59%
2001: 2.83% 3.17% 7.94% 7.94%
2000: 3.38% 3.79% 6.34% 7.64%
1999: 2.19% 2.45% 4.95% 6.72%
1998 : 1.55% 1.74% 3.43% 5.51%
1997: 2.34% 2.62% 2.82% 4.94%
The White Plains inflation factor is based on a comparison with the Chicago metropolitan area where according to Inflationdata.com, if you earned $100,000 in Chicago in 2007, you would have to earn $112,000 in White Plains to equal your salary buying power if you moved to White Plains. If you add 12% to the national inflation rate, you get an approximation of the White Plains Inflation Rate.
Largest Budget Increase in 17 Years
Against this economic backdrop, the School District unveiled a January “Preliminary” 2008-2009 Budget that is the largest year to year increase in 17 years with no cuts. Assistant Superintendent for Business of the White Plains City School District Fred Seiler introduced a “preliminary” school budget for 2008-2009 of $190.7 Million, $16.6 Million more than the current year budget of $174.1 Million at last night’s first Board of Education meeting of the new year. The last year an increase this size was contemplated was 2001-2002 when the district adopted an 8% increase.
In the chart above, it shows the school district has consistently padded inflation increases with quite a bit extra, maintaining spending, and actually increasing it. The tax increases, dictated by assessment erosion, the equalization rate, and just plain paying for the increases, have exceeded the budget increase percentages for a decade.
Doubling the Budget Increase
The size of the 2008-2009 preliminary school budget increase is more than double this year’s increase of 4.4%. Seiler cautioned that these were “preliminary” numbers based on worst-case scenarios for a year-to-year rollover budget.
Seiler introduced only the expense budget, and did not project possible 2008-2009 revenues. He said he anticipated less state aid than the district received last year.
He said the major driving force was salaries and benefits up 5.26% (which includes the projected settlement with the teachers union currently being negotiated), plus the debt service for bonding for the current school capital project and borrowing for certiorari tax refunds of approximately $7 Million.
Commenting on the all-important assessment roll recently announced by the city as having slightly increased as of January 1, Seiler said he expected that to drop because it usually does based on challenges to assessments.
Tote that Bale. $800 a year tax increase on median home.
Last year a $9 Million budget increase (the smallest increase in ten years), yielded a $35 per $1,000 of assessed value tax increase. The jumbo $16.6 Million increase offered up in January would mean a $57 dollar per thousand increase in the tax rate to about $531 per thousand – if the city assessed value stays at the present level of $290 Million. If it drops, the tax rate will go up higher.
This would mean a yearly tax increase for the $700,000 home of over $800 a year, bring the school tax on the median White Plains home to about $8,000 a year – still considerably less than similar priced homes in other school districts – it should be pointed out.
Cosmetic Cuts Expected
To be fair, in January, Seiler stressed the figures were preliminary that the school district had not gotten their primary health insurance increase yet, and that he anticipated state aid to decrease – and that there might be some property tax relief cap initiated by the governor. Superintendent of Schools Timothy Connors said he did not expect that the property tax cap idea advanced by the Governor would be a reality any time soon.
Driving the increase was $7 Million debt service taken on when the district opted to borrow to pay certiorari refunds ($4 Million), and decided to take on the $66 Million Capital Improvements project ($1.5 Million), and previous certiorari bond commitments, and the $5 Million in increased salaries and benefits.
Seiler expected the preliminary increase to drop as the district reexamined the numbers.
